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Eley v. Stadium Group, LLC

United States District Court, District of Columbia

February 17, 2017

MIYA ELEY, et al., on behalf of themselves and all others similarly situated Plaintiffs,
v.
STADIUM GROUP, LLC, et al., Defendants.

          MEMORANDUM OPINION

          KETANJI BROWN JACKSON, United States District Judge

         Miya Eley, Tamika White, Jessica Glover, Crystal Fletcher, Ashley Tyree, Shrell Turner, Britney Robinson, Karen Tucker, Keonda King, Antonia Miller, Angela Eiss, Sara Kendall, Ashley Gooden, Rayanee Tabbs, Autumn Gregory, Dana Ricks, and Taneisha King (collectively, “Plaintiffs”) are former exotic dancers who have filed the instant lawsuit against Defendants Stadium Group, LLC and RCX, LLC (“RCX”) to recover unpaid wages and statutory damages under the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 201 et seq., and the D.C. Minimum Wage Revision Act of 1992 (“DCMWA”), D.C. Code §§ 32-1001 et seq. (See Sixth Am. Compl. (“Compl.”), ECF No. 31, at 1-2.)[1] On October 21, 2016, the parties reached a settlement in this matter. (See Notice of Settlement, ECF No. 66.) Before this Court at present is the parties' Joint Motion to Approve FLSA Settlement Agreement And For Dismissal, With Prejudice (see Joint Mot. to Approve FLSA Settlement Agreement And For Dismissal, With Prejudice (“Joint Mot. to Approve”), ECF No. 68)-an agreement that the parties have brought to the Court in an abundance of caution. See Carrillo v. Dandan, Inc., 51 F.Supp.3d 124, 129 (D.D.C. 2014) (noting that “[t]he D.C. Circuit has not opined about whether judicial approval is required of FLSA settlements”). For the reasons explained below, this Court concludes that the parties' proposed settlement agreement resolves a bona fide dispute and contains fair and reasonable terms. See Sarceno v. Choi, 78 F.Supp.3d 446, 450-51 (D.D.C. 2015). Therefore, the parties' joint motion for approval of the settlement agreement will be GRANTED. A separate order consistent with this opinion will follow.

         I. BACKGROUND

         Plaintiffs are former dancers who performed at The Stadium Club, an exotic dance club in the District of Columbia that is presently owned by Defendant RCX. (See Mot. to Approve at 4.)[2] Plaintiffs allege that they were “employees” within the meaning of the FLSA and the DCMWA, and thus were entitled to minimum wage and overtime compensation for the hours they worked at the club. (See id.) Plaintiffs also argue that Defendants subjected certain Plaintiffs to retaliation. (See id.)

         On September 22, 2015, at Plaintiffs' request, this Court conditionally certified a class comprised of all individuals who worked at The Stadium Club from September 19, 2011, until September 22, 2015. (See Order Granting in Part and Den. in Part Pls.' Mot. for Notice to Potential Pls. and for Conditional Certification, ECF No. 30, at 1.) Thereafter, several additional Plaintiffs opted into this action. (See Mot. to Approve at 4.) The parties then engaged in a period of discovery, and elected to pursue mediation. (See Id. at 5, 6, 9.)

         After completing two full-day mediation sessions, RCX reached a settlement agreement with each of the individual plaintiffs. (See Id. at 6.) Pursuant to the terms of the proposed agreement, RCX agreed to pay each Plaintiff an amount that varied between $1, 700 and $17, 200 (totaling $165, 100), plus attorneys fees and costs, in exchange for Plaintiffs' promise to release RCX from “any and all claims for any wage and hour violations that may have occurred arising from or relating to each Plaintiff's employment[, ] . . . whether known or unknown, . . . through the date each Plaintiff signs [the] Agreement.” (Settlement Agreement, ECF No. 68-1, at 6.) To fulfill this payment obligation, RCX agreed to make quarterly installment payments to each of the named Plaintiffs over the course of approximately three years, calculated based on each Plaintiff's pro rata share of the total settlement amount. (See Id. at 4 (outlining Plaintiffs' proportionate shares of the settlement fund).) In addition, the proposed agreement provides $99, 900 in compensation for attorneys' fees and costs, which represents approximately 37% of the total $265, 000 recovery amount. (See Settlement Agreement Payment Schedule A, ECF No. 68-2, at 1.)

         On December 21, 2016, the parties jointly moved for this Court's approval of the proposed settlement agreement. (See generally Mot. to Approve.) This Court held a hearing regarding the terms of the settlement on February 9, 2017.

         II. LEGAL STANDARD

         “The D.C. Circuit has not opined about whether judicial approval is required of FLSA settlements reached after an FLSA suit has been filed or the related issue of whether such approval is a prerequisite for subsequent judicial enforcement of a private settlement.” Sarceno, 78 F.Supp.3d at 449. However, given that a court's refusal to assess proposed FLSA settlements ex ante “leaves the parties in an uncertain position[, ]” courts in this district often agree to review proposed FLSA settlements when the parties jointly seek judicial approval. Carrillo, 51 F.Supp.3d at 131; see also Sarceno, 78 F.Supp.3d at 449-50. Notably, however, “[t]he Court's review of a proposed FLSA settlement is properly limited only to those terms precisely addressing the compromised monetary amounts to resolve pending wage and overtime claims.” Carrillo, 51 F.Supp.3d at 134.

         When assessing the terms of an FLSA settlement agreement, the court must first determine whether the proposed settlement “resolves a bona fide dispute.” Carrillo, 51 F.Supp.3d at 131. “A settlement is bona fide if it reflects a reasonable compromise over issues that are actually in dispute[.]” Sarceno, 78 F.Supp.3d at 450 (internal quotation marks and citation omitted). Then, “[o]nce a bona fide dispute has been established, the court must consider whether the agreement reflects a reasonable compromise of disputed issues [rather] than a mere waiver of statutory rights brought about by an employer's overreaching.” Id. at 450 (second alteration in original) (internal quotation marks and citation omitted). This second inquiry takes into account the “‘totality of the circumstances'” with an eye toward whether an FLSA settlement is fair and reasonable. Carrillo, 51 F.Supp.3d at 132 (explaining that “the focus is on the fairness of the process used by the parties to reach settlement and the practical ramifications of the settlement”); see Wolinsky v. Scholastic Inc., 900 F.Supp.2d 332, 335 (S.D.N.Y. 2012); see also Selk v. Pioneers Mem'l Healthcare Dist., 159 F.Supp.3d 1164, 1173 (S.D. Cal. 2016) (acknowledging that “many courts have adopted a totality of circumstances approach” and thereafter adopting a variation on that approach). The factors that a court considers include “whether the proposed settlement (1) was the product of overreaching by the employer; (2) whether the settlement was the product of negotiation between represented parties following . . . [a]rm's length bargaining[;] and (3) whether there exist serious impediments to the collection of a judgment by the plaintiffs.” Carrillo, 51 F.Supp.3d at 132 (alterations in original) (internal quotation marks omitted).

         Furthermore, when a proposed settlement of FLSA claims includes the payment of attorneys' fees, courts regularly assess the reasonableness of the fee award. See, e.g., Wolinsky, 900 F.Supp.2d at 336. In reviewing fee awards in similar contexts, courts in this jurisdiction have considered the percentage of the recovery that is comprised of attorneys' fees, as well as the relationship between the costs incurred and the fees recovered. See Sarceno, 78 F.Supp.3d at 452; see also Carrillo, 51 F.Supp.3d at 134 (explaining that courts are “reluctant to approve a settlement where the plaintiffs' attorneys receive more in compensation than the plaintiffs themselves”).

         III.ANALYSIS

         A. This Court Finds That The Parties' Proposed Settlement Agreement Resolves A Bona Fide Dispute And Is Fair And Reasonable

         The parties in the instant case have identified several genuine disputes of fact and law that would need to be addressed in order to resolve Plaintiffs' FLSA claims. These disputes involve issues that are substantial and material, such as (1) whether Plaintiffs even qualify as “employees” for the purpose of the relevant wage-and-hour statutes (i.e., it may well be that Plaintiffs are independent contractors with no right to wages or statutory protections, see, e.g., McFeeley v. Jackson St. Entm 't,825 F.3d 235, 241-44 (4th Cir. 2016) (assessing whether exotic dancers should be classified as independent contractors or employees); Reich v. Circle C. Invs. Inc., 998 F.2d 324, 327-29 (5th Cir. 1993) (same)); (2) what number of hours each Plaintiff worked at The Stadium Club during the relevant period (see Mot. to Approve at 8); and (3) whether the payments Plaintiffs received in exchange for private or semi-private dance performances included service fees owed to Defendants that might have exceeded any minimum wage obligation Defendants owed (see February 9, 2017 Hr'g ...


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